Council OKs budget, three-mill tax cut

The Baldwin City Council approved a 2002 budget Monday, which carries a three-mill drop in taxes for property owners.

In a 4-1 vote, with council member Ted Brecheisen voting against, the council approved the 2002 budget, which totals $21,659,722. The property tax levy needed to fund the budget drops to 41.654 mills.

That means the city levy on a home valued at $100,000 will be $479 compared with $513 last year on the same home.

But City Administrator Larry Paine said the house that was valued at $100,000 in 2001 would increase in value to $113,000 in 2002, which would also increase the city levy by $27.

Even though the 2002 budget is set at $21,659,722, up from this year's budget of $7,870,078, the council could have funded the budget with a levy decrease of 12 mills.

But instead of dropping the levy all 12 mills, the council approved a three-mill drop from this year's 44.654 mills to help plan for the city's future needs.

"Our plan has been to take some of the levy surplus and allocate it to certain projects and still have a decrease in the levy rate," Paine said.

There are several reasons the mill levy dropped while the total budget number increased, Paine said. Assessed value of property in Baldwin has increased 13.82 percent, up from $15,481,717 to $17,622,045.

The city also also seen a 17 percent increase in sales tax revenue because of the increase in new business.

Paine said Baldwin City also refinanced two general bond debts and the U.S. Highway 56/Douglas County Road 1055 temporary bond.

"What that allows us to do is reduce the levy on general bonds and interests significantly," he said.

A key reason the 2002 budget has almost tripled from the current budget is because of soft budgeting in capital improvements, Paine said. Some of the items that have been budgeted for are not definite projects.

Projects like building a new water tower at a cost of $1 million, Baker Wetlands water line relocation at $400,000 and electrical generation at an estimated $10 million have not yet been approved, but are possible future projects, he said.

An item included in capital improvements that has been approved is the wastewater treatment plant at $3.2 million.

Even though not all the projects in capital improvements are definite, Paine said they must be budgeted for to be considered in the future.

An increase in some utility rates also has been figured into the budget.

The sewer rate is increasing because of the building of the treatment plant. Paine said rates will require a $10 per month adjustment in base rate from $5 to $15 and an 85 cent per month adjustment in monthly unit costs from $1.75 to $2.60 per hundred cubic feet of water.

"We knew this was coming for a long, long time," he said.

There will also be an incremental change in the water rate because it's going to cost more for water that Baldwin buys from Lawrence.

There will be no electrical rate increase.

Mayor Ken Hayes said he liked the idea of giving residents a tax break, but not dropping the mill levy by a large number.

"From my point of view, if we have these funds being allocated toward future problems, we can get the roller coaster effect out of the mill levy," Hayes said. "We need to have a comprehensive plan that gives some cohesion to the city."

Paine said by decreasing the levy by only three mills, the city can use the excess money for future projects including High Street bridge replacements and equipment replacements.

Brecheisen said he thought planning for the future was a good idea, but he wanted to give residents more of a tax break than just three mills.

"I know we've got some things to plan for, but I'd like to give people some property tax relief," he said. "If we've got a chance to lower this thing a little more, I think we ought to do it."

Council member Ken Wagner said he thought the city needed to start building reserves.

"As long as the city continues to grow, an opportunity will come along that we need to act on quickly," Wagner said. "If we don't have the funds, it ties our hands behind our backs."

"I don't see anything in here for recreation," Green said. "Do we benefit from parks? Yes. Why can't we put in the budget an amount for the upcoming year for recreational purposes?"

Hayes said the city needed to prioritize future improvement projects.

"Do we benefit from bridges we drive across or seesaws that work?" he said. "I'm not against recreation. But we have to take care of the nuts and bolts before we take care of the peripheral items like recreation."

Council member George McCrary said he agreed the city needed to set aside some funds for improvement purposes like replacing bridges.

"I would rather set funds aside and be a little proactive and reduce our mill levy at the same time so we can eliminate the peaks and valleys," McCrary said. "That way we won't see a 10-mill jump in one project."